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3 Good Reasons Not to Franchise Your Business

Everyone knows a guy.’ You drop your phone, or it just stops working, and in an effort to avoid paying hundreds of dollars for a new one, you go to your guy’ to get it fixed. But “it’s not a great experience,” says Donna Custance. “The word we hear most often to describe those places is sketchy.'”

Custance is the co-founder and Chief Marketing Officer at Fixt Wireless Repair, which aims to supplant those guys.’ The company has six locations in the Greater Toronto Area, with two more currently being built. Custance and her partners—all veterans of the wireless industry—see a big opportunity in standardizing and improving the mobile device-fixing process. “There’s over 40 million devices in this country if you combine cellphones and tablets, and at any given time it’s estimated that about 25% of them are either broken and in need of repair or replacement,” she explains.

Fixt aims to have 20 locations in the Golden Horseshoe by the end of 2017, and more than 80 across the country within the next five years. “We really believe that any market can sustain a number of these locations,” says Custance, noting that most Canadians have a device that might need to be fixed at some point.

Most service businesses looking to grow at such a rapid pace adopt a franchise model. Not Fixt. “There’s pros and cons to both approaches, corporate-only stores and franchises,” says Custance. “We felt strongly that corporate was the right approach.”

1. Keeping control of the experience

Custance marvels at how reliant most people are on their mobile devices. “I don’t know about you, but if I leave home in the morning and I’ve forgotten my wallet, I just keep going,” she says. “But if I leave without my phone, I definitely go back.” There’s even a word for it: Nomophobia, the anxiety that comes with not having your mobile phone.

Phone fixes have traditionally been “very expensive to do and often took weeks,” says Custance. Fixt aims to make the process quicker and cheaper, to help people avoid experiencing nomophobia. “We have highly-trained technicians who can solve almost any problem ¦ so that people get their devices back fast,” says Custance. Fixt says it can do most fixes in under an hour, and it provides a lifetime warranty on the work.

While plenty of franchised businesses provide amazing service, owning all the locations allows Fixt to control the customer experience directly.

2. Building the brand

One major challenge for Fixt has been “the perception of the current players and the current marketplace,” says Custance. Phone owners who’ve had negative experiences with independent repair shops need to be made comfortable with the idea of device fixing.

The hope is that as Fixt established its brand and educates customers about its offering, the company can overcome the current, negative perception of this kind of work. “As awareness grows, and more and more people see our stores and start to experience the service that we’re giving them, word’s getting out quickly,” she says.

Building a consistent, positive brand is crucial to Fixt’s growth prospects, says Custance. “That’s a lot easier to do when you’re controlling everything corporately than when you have independent business owners trying to bring that brand alive for you.”

3. Eyeing the exit

While franchising can bring in much-needed capital and reduce the cost of expansion, it brings its own complexities and expenses. The Fixt founders ultimately decided the returns of the model were not worth it—especially if they eventually look to be acquired. “We’re always thinking about the possibilities of exiting,” says Custance. “In most cases, franchise businesses can be a little more difficult to sell, so we’ve elected to maintain our strategy and grow under a model that’s strictly corporate locations.”

For more insights from Custance, listen to this week’s episode by clicking the button above or download by clicking on the iTunes logo below: